Post-Christmas US economic data showed that consumer confidence and home prices are on the upward track, boosting market sentiment in the last few trading days of 2016.
US equities closed higher on Tuesday, led by a strong performance in technology stocks. The Nasdaq Index ended at a new record high of 5,487 points.
The US consumer confidence index soared to 113.7, a level that not seen since the Dot-com bubble. American’s optimism about the stock market also registered a dramatic one-month surge, according to Bloomberg data. This comes despite of relative high valuations of US equities, and the potential harm that strong US dollar could bring to companies earnings in the coming months.
Singapore stocks climbed 0.51% or 14.7 points yesterday, thanks to the last minute rally. Blue chips were among the outperformers, and surge in some oil & gas names helped to boost market sentiment. However, extremely low trading volume suggested that this could be a technical rebound, or temporary rally. As of now, 2,900 remains to be an immediate resistance level for Straits Times Index.
Singapore stocks have been ranging between 2,800-2,900 points for most of 2016, due to low oil prices and a pessimistic economic outlook. We will need to see a turnaround in the fundamental elements before expecting a strong rebound in local stocks. A relatively quiet calendar towards the end of the year suggests that the Straits Times Index may range between 2,800-2,960 points, unless we see a “window-dressing” rally this week.
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